Genuine Parts Co (GPC)

Genuine Parts Co's liquidity ratios, based on the provided data, show a mixed performance over the years.

1. Current Ratio: The company's current ratio has been slightly decreasing from 1.21 in 2020 to 1.16 in 2024. While the ratio remains above 1, indicating that Genuine Parts Co has sufficient current assets to cover its current liabilities, the declining trend may raise concerns about its ability to meet short-term obligations in the future.

2. Quick Ratio: The quick ratio, which is a more stringent measure of liquidity as it excludes inventory from current assets, has decreased significantly from 0.17 in 2020 to 0.06 in 2024. This suggests that the company may face challenges in meeting its immediate liabilities without relying on the sale of inventory.

3. Cash Ratio: The cash ratio, which is the most conservative liquidity measure focusing only on cash and cash equivalents, also shows a declining trend from 0.17 in 2020 to 0.06 in 2024. This indicates that Genuine Parts Co's ability to cover its current liabilities solely with cash on hand has weakened over the years.

Overall, based on the analysis of these liquidity ratios, Genuine Parts Co's ability to meet short-term obligations has shown some deterioration, particularly in terms of quickly liquidating assets to cover immediate liabilities. Investors and stakeholders may need to monitor the company's liquidity position closely to assess any potential risks in the near future.

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Additional liquidity measure

The cash conversion cycle indicates the efficiency with which Genuine Parts Co manages its cash flow processes. From the data provided, we observe a slight improvement in the cash conversion cycle over the years, decreasing from 117.60 days as of December 31, 2020, to 116.03 days on December 31, 2021, and further declining to 112.93 days by December 31, 2022. However, there was a slight uptick to 115.34 days as of December 31, 2023, followed by a notable increase to 134.52 days by December 31, 2024.

Overall, Genuine Parts Co's cash conversion cycle has shown some variability, with periods of improvement and slight deterioration. It is important for the company to closely monitor and manage its cash conversion cycle to ensure efficient utilization of resources and maintain healthy liquidity levels.